Lifting licence conditions

Different procedures apply for releasing banks, securities dealers and branches of foreign banks and securities dealers from prudential supervision. Representative offices of foreign banks and securities dealers only need to inform FINMA that they are closing.

The procedures for lifting licence conditions and being released from FINMA supervision are outlined below for each type of licence.

Banks and securities dealers

The general meeting of shareholders must amend the articles of association to the effect that the company’s purpose no longer includes any activity that requires a licence under the Banking Act or the Stock Exchange Act and the term "bank" or "securities dealer" no longer appears in the company name. The organisational and business regulations must also be amended accordingly.

In principle, therefore, the institution is no longer allowed to engage in any banking or securities trading activity. Only transactions that serve to reduce positions in order to end the activity that requires a licence are allowed. This means that the institution remains subject to the Banking Act / Stock Exchange Act until formally released from prudential supervision and must in principle continue to comply with all of the regulatory requirements.

As with voluntary liquidation, creditor protection must be guaranteed:

The intended release from supervision must be published three times in the Swiss Official Gazette of Commerce (SOGC). These notices must include a request to register any claims against the institution or objections to its release from supervision with the regulatory audit firm.

The institution must inform FINMA as to how it plans to wind up its banking / securities trading business and how the process is progressing.

FINMA issues a ruling releasing the institution from prudential supervision as soon as all contracts relating to the banking / securities trading business have been wound up and registered claims either settled or guaranteed. Before this happens, the regulatory audit firm must submit an audited interim balance sheet and confirm that the SOGC notices have been published as required, either no claims have been registered or all registered claims have been either settled or guaranteed, there are no longer any positions requiring protection, no activity requiring a licence is now being carried out and thus no objections can be raised against the institution’s release from prudential supervision.

Branches of foreign banks and securities dealers

The branch must submit the parent company’s decision to close it to FINMA and explain how it plans to wind up its business. A key issue in this connection is what will happen to its clients, assets and liabilities.

The branch is released from prudential supervision and issued with a certificate for deletion from the Commercial Register as soon as the regulatory audit firm has confirmed that the release from supervision has been published in the SOGC, the activity requiring a licence in Switzerland has been fully discontinued and full account has been taken of creditor and investor protection.

Representative offices of foreign banks and securities dealers

All that is required to release a representative office from FINMA supervision is notification from the foreign bank or securities dealer that the office is to be closed.